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How the AI Bubble Bursts

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Re: How the AI Bubble Bursts

#351

Post by irke »

coldpie wrote: post #287
infecto wrote: post #182

Earlier quoted context omitted.

I wish this was higher up. I have been tracking the same since Thanksgiving ‘25 and the growth is unreal. Again I don’t know where the cards fall maybe the industry overspent on capex but it’s at least easier to see why they are spending based on demand. The risk of being left out is greater than overbuilding.

I do wonder how much of the apparent demand is driven by companies automatically running these things when users didn't actually ask for it. For example every web search I make now has an AI response that I scroll right past. I'm sure that counts for someone's token usage data, but I got zero value from it. This is happening in almost every software product now.

Tokens as a metric is the analogue of users as a metric.

In the end value per user is what matters in relation to being a healthy going concern and valuation in relation to Meta for example. Value per token is what should matter too - after all that’s what people are paying for.

Re: How the AI Bubble Bursts

#352

Post by BirAdam »

fsloth wrote: post #293
aurareturn wrote: post #230

Earlier quoted context omitted.

users are not being tricked into paying $200 a month I can't believe people actually believe that people and companies are tricked into paying for tokens. My $20 Codex subscription is so useful, I can easily see myself paying $200 for it. This belief is so common amongst AI collapse people online. I'm guessing these people have only used free ChatGPT or worse, they use Windows and get Copilot shoved down their throat…

I'm paying $20 for Codex and $90 for the Claude Max plan. They are a "pry from my cold dead fingers" product for me. IMO if someone tried this tech last time 6 months ago, or their only exposure is eg. via MS copilot, they do have a rational reason for skepticism. No technology of this complexity has improved this rapidly in my memory (well, ok, we had the CPU speed races from 90's to early 2000's).

The CPU speed race might be the most apt comparison I've yet heard.

From the 80486 to AMD Athlon64 X2 and much of that progress was enabled by better EDA being run on the more powerful CPUs being made with each improvement.

Now, we have better models helping to create even better models.

Re: How the AI Bubble Bursts

#353

Post by coder68 »

ajay-b wrote: post #123

I would be very sad to lose services like ChatGPT. It has significantly improved my workflow by digesting and analyzing huge documents, and helping me to synthesize and respond better. May be I am part of a minority.

The good news is local models have significantly improved. If it all goes down today, you can still run e.g. Qwen 3.5 at home, and it's "good enough" for most workloads.

With a gaming GPU you can run Qwen3.5-35B-A3B. I use 122B-A10B on my local rig (1x6000 Pro), and 397B-A17B on my 2x6000 Pro server (some spillover into CPU/RAM). It's pricey now but probably within a few years it'll become very affordable.

Re: How the AI Bubble Bursts

#354

Post by ido »

skeeter2020 wrote: post #239
Aperocky wrote: post #58

Earlier quoted context omitted.

Demand of tokens is absolutely skyrocketing. And unlike the traditional "this will replace humans right away", I think what this introduce is a lot of incentive to spread those token in places where there was never any incentive to hire a software engineer for previously. In turn, that will drive a lot of business activity in those area that will potentially fail given the current quality of the output. This feels li…

Maybe we need to focus on a better definition of "bust" but we will surely see something along the lines of the hype-cycle graph in AI; what technology has not fallen into the trough before (best case) reaching a more steady-state of use and growth?

cars? airplanes?

Re: How the AI Bubble Bursts

#355

Post by irke »

pydry wrote: post #316
raincole wrote: post #286

Earlier quoted context omitted.

It is quite hard to imagine how the demand is saturated now. I think any company that uses a sliver of AI will happily increase their token consumption 100x if it's free.

Executive FOMO disease is being exploited by the model providers to push for maximal token usage even when it is pointless. This includes encouraging people to set up elaborate multi model set ups (e.g. "gas town") for coding that do not meaningfully improve productivity but which certainly do cause token usage to explode. It also includes encouraging execs to use token consumption as a proxy for productivity - almos…

Yep - it’s impossible to separate experimental tokens vs value creating ones.

Ultimately the performance will be assessed via the income statement and cash flows of customers of the model producers.

Frankly in the window pre-IPO it’s in the best interests of OAI et al to show a line going to the top-right in relation to tokens, in their prospectus. What does that mean?

Strategic manipulation.

Re: How the AI Bubble Bursts

#356

Post by notatoad »

owlmirror wrote: post #119
faangguyindia wrote: post #78

Earlier quoted context omitted.

If the gains are real why the limits are so bad? Google can barely serve Anti-gravity.

Isn't that at the moment still a free product? Of course they will not prioritize serving those requests. That tells you nothing.

it has a paid option. and the antigravity subreddit is full of people who claim to be paid users, complaining about constantly hitting limits.

Re: How the AI Bubble Bursts

#357

Post by notatoad »

leoc wrote: post #227
ajross wrote: post #201

Earlier quoted context omitted.

No, they signed a bunch of contracts for future deliveries. That's not a supply constraint. The factories making RAM continued operating and serving their existing deliveries, and in fact they still are. Freshman economics would say that supply is fine and that prices shouldn't move. But they did anyway. And the reason is speculation.

I don't get it tbh. What market participants were speculating here? There aren't futures markets in RAM as far I know, though I certainly don't know much. And the supply constraints appear to have been pretty real (though maybe not immediate) if eg. Valve was begging publicly for RAM consignments. Were there pure-play speculators filling warehouses with DDR5?

>There aren't futures markets in RAM as far I know

sure there is. not formally, but if you hold a contract for x units of future production, you can sell that contract to somebody else who wants those units more than you do.

Re: How the AI Bubble Bursts

#358

Post by the_gipsy »

aurareturn wrote: post #92

This is an awful article. I don't know how it reached #1 on HN. Bottom line is that H100 prices are near 3 year highs, A100s are still profitable to run, B200 prices are increasing, no one has enough compute. Google, OpenAI, Anthropic, Meta, AWS, Azure are all compute constrained. Every single one of them said so publicly. Neo clouds are telling customers they're all sold out now and you even have to book compute in…

> but Anthropic is kicking butt in AI

that's not what the article said:

> They turned to showing ads in ChatGPT, something Sam Altman once called a “last resort”, while Anthropic is crushing them

Re: How the AI Bubble Bursts

#359

Post by hirako2000 »

Throaway1975123 wrote: post #319
hirako2000 wrote: post #306

Earlier quoted context omitted.

Value? There are millions of other wanna be engineers doing exactly the same, assuming demand will scale as much as the offer. What returns are you getting on those? Let me create 500 websites, deployed for free, I hand that over to you by end of day. Will you give me a cent per piece? If so, happy to do business with you.

The value is obviously to the people who will use this to replace engineers. I would happily pay $200 a month for this. Luckily I dont need to, it's free. Literally every game and website that I would have had to pay someone else to make I can now make myself. There's no value in that? A year ago the best free LLM couldn't even give me a basic gridmap and collision. Now it can give me a full RCT style prototype & edi…

> luckily I don't have to. It's free.

Ponder that for a minute.

There are over 2 million games, for Android alone.

That you weren't making games before the advent of LLMs makes it cool for you to build, and at no cost. But people have been able to make games without them and already grew the market to saturation.

If the outcome of LLMs is that we get more games, it won't imply that people will consume more games. Most games never get played anyway.

Re: How the AI Bubble Bursts

#360

Post by jdmoreira »

hirako2000 wrote: post #117
Aperocky wrote: post #58

Earlier quoted context omitted.

Demand of tokens is absolutely skyrocketing. And unlike the traditional "this will replace humans right away", I think what this introduce is a lot of incentive to spread those token in places where there was never any incentive to hire a software engineer for previously. In turn, that will drive a lot of business activity in those area that will potentially fail given the current quality of the output. This feels li…

Tulips sales also skyrocketed. Seriously, what value are tokens providing other than justifying layoffs. Concretely. Today. Not in the speculating scenario that cardiologist could be replaced with models. We see this new trend of agentic coding, again a promise software will be written that way going forward, despite the number of fiasco already experienced when trusting a model turned bad. The use case may provide v…

are you seriously comparing AI to tulips? I don't even know what to say. Even if you are very bearish about the technology certainly you can't be this detached from base reality. Yet here we are
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